TDR Capital acquires Zuber Issa’s stake in Asda

TDR Capital will now hold 67.5 per cent of Asda, while Mohsin Issa retains 22.5 per cent

• Pramod Thomas
• 07 June, 2024

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By: Pramod Thomas

PRIVATE EQUITY firm TDR Capital on Friday (7) announced the acquisition of Zuber Issa’s shares in supermarket chain Asda.

With this transaction, TDR Capital will hold 67.5 per cent of Asda, while Mohsin Issa retains 22.5 per cent, and Walmart maintains a 10 per cent stake. The deal is expected to close during July-September, a statement said.

After acquiring Asda with TDR in June 2021, Issa brothers integrated a portion of their EG Group forecourts business into the supermarket chain last year. It was announced that EG Group has sold its remaining UK petrol stations to Zuber for £228 million.

During their tenure, they have focussed on expanding Asda’s presence and improving customer value, notably increasing the store count from 623 to 1,200 and launching a successful loyalty app with six million users.

Mohsin Issa, co-owner of Asda, said: “Today’s announcement further underlines my own and TDR’s confidence both in Asda and the UK consumer market. As a shareholder group, we are excited about the growth journey we are on. Asda is an iconic British brand and we are committed to setting it up for long-term success and delivering great value for customers across the UK. To that end, I am incredibly proud of the investments we have already made in transforming the Asda business, including the launch of the new Asda Express convenience format, the Asda Rewards customer loyalty scheme and the £800m investment in a best in class IT infrastructure to bring new data and insight capabilities.

“Above all, I am proud and grateful for the everyday commitment and loyalty of our Asda colleagues and their dedication to our customers. I also want to add my personal support and best wishes for Zuber’s plans as we continue our successful family partnership, working as partners on our personal co-investments, family office philanthropy and Issa Foundation projects.”

Zuber Issa, co-founder and co-CEO of EG Group, said: “Since Mohsin and I, alongside TDR, took ownership of Asda, we have driven a period of significant investment and entrepreneurial growth activity. Notably, Asda acquired a market-leading UK convenience retail and foodservice store business from EG Group. With the divestment of my Asda shares, I will now turn my attention towards leading and managing the remaining EG UK forecourt sites that I have personally acquired, and spend more time on my charitable endeavours.

“I am pleased to see TDR increasing its investment in Asda. With Mohsin and TDR’s ongoing focus and shareholding, I am confident that Asda will achieve its growth ambitions.”

Gary Lindsay and Tom Mitchell, managing partners at TDR Capital, stressed their commitment to Asda’s growth.

They said, “We have made significant strides in transforming Asda, expanding its footprint, and enhancing customer loyalty. As majority owners, we will continue to invest in the business to ensure sustainable, long-term growth.”

Asda Chairman Stuart Rose welcomed TDR’s increased investment and said, “This is a clear sign of TDR’s commitment to Asda’s future. We are focused on delivering great value and ensuring long-term success for all stakeholders.”

In addition to this ownership change, Asda is actively searching for a permanent CEO to guide the company’s next phase of growth.

The supermarket chain recently reported a 24 per cent increase in adjusted EBITDA to £1.078 billion for the year ending December 31, 2023, and successfully refinanced over £3.2bn of its debt, the statement added.